Can a Texas city use its mass transit sales tax money to repair its regular streets?

Texas AG Opinion JM-979: Can Transit Taxes Pay for Regular Street Repairs?

Plain-English summary

When a Texas city sets up a mass transit department and its voters approve a local sales tax to pay for buses or rail, that tax money comes with strings attached. It is dedicated money, meaning it can only be spent on the purpose the voters approved. A state senator asked a natural question: since transit vehicles run on city streets and wear them down, can the city dip into that transit tax to help maintain those streets? The Attorney General said no.

The governing statute, article 11182, is explicit that taxes collected under it "may be used only for mass transit purposes." The law defines what a transit "system" is (the buses, rail lines, stations, garages, and the property operated to move passengers) and what "mass transit" means (moving passengers and their hand-carried bags by surface, overhead, or underground transport, not by aircraft or taxicab). General street maintenance is not on that list.

The statute does let a transit department use the streets, and in fact it can do substantial work on them: relocating, raising, rerouting, changing the grade of, or otherwise altering a street when that is part of building, repairing, or operating the transit system itself. So if laying a rail line or a busway requires reworking a street, the transit department has that power. But the Attorney General drew a clear line between altering a street as part of a transit project and simply maintaining a street because transit vehicles drive on it.

The reasoning turned on the ordinary meaning of the transit system's right to "use" the streets. Using a street naturally means subjecting it to normal wear and tear, which the Legislature must have expected when it wrote that provision. Nothing in the statute makes the transit department pay a fee, out of its dedicated tax funds, for that ordinary use. Routine upkeep of a city street that transit buses happen to travel is a general municipal responsibility, funded from general city sources, not something the voter-approved transit tax was raised to cover. So the transit tax cannot be used for the general maintenance of city streets.

Currency note

This opinion was issued in 1988. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Texas transit-authority law has changed considerably since 1988, and many of the older V.T.C.S. transit articles have been recodified into the Transportation Code. Article 11182 and its structure for municipal transit departments and dedicated sales taxes should be checked against current Transportation Code provisions before relying on the section numbers here. The underlying principle, that a voter-approved dedicated transit tax can be spent only on the transit purpose it was approved for, reflects a general rule about dedicated funds that remains sound, but the specifics should be verified against current law.

Who this opinion affected (as of 1988)

Cities and towns with mass transit departments: The opinion told them the dedicated transit sales tax could not be spent on general street maintenance, even for streets used by transit vehicles.

Municipal budget and public works officials: The opinion clarified that ordinary street upkeep must be funded from general city sources, not the transit tax, while transit-project street alterations remain a proper transit expense.

Transit riders and taxpayers: The opinion protected the dedicated character of the transit tax, keeping the money on transit rather than diverting it to street maintenance.

Common questions

Can a city spend mass transit tax money on fixing potholes in its streets?
No. In this opinion the Attorney General concluded that article 11182 transit taxes may be used only for mass transit purposes, and general street maintenance is not among the transit department's enumerated powers.

But transit buses use and wear down the streets, so why not?
Because the statute treats a transit system's right to use the streets as including normal wear and tear, without tying that use to a fee paid from transit funds. The Attorney General found nothing making the transit tax responsible for ordinary street upkeep.

What street work can the transit department pay for?
Work that is part of the transit system itself, relocating, raising, rerouting, changing the grade of, or otherwise altering a street in the construction, reconstruction, repair, maintenance, or operation of the system, under section 6(c).

Who pays for maintaining the streets, then?
The opinion implies ordinary street maintenance remains a general municipal responsibility funded from the city's general sources, not from the dedicated transit sales tax.

Background and statutory framework

Article 11182 permits certain incorporated cities and towns to establish a mass transit department (section 2(a)). If voters approve a local sales and use tax dedicated to funding a mass transit system, the city transit department may build or acquire and operate the system (sections 3, 4, 5, 7), and taxes collected under the article "may be used only for mass transit purposes" (section 8(f)).

The statute defines a mass transit "system" as all real and personal property owned or held by an incorporated city or town and operated for mass transit purposes, including land, easements, rights-of-way, other interests in land, franchises, rail and bus lines, stations, platforms, terminals, garages, shops, control houses, other buildings and structures, rolling stock, signals, other equipment, supplies, and other facilities necessary or convenient for the use of or access to mass transit by persons or vehicles or for the protection or environmental enhancement of mass transit (art. 11182, section 1(6)). "Mass transit" is the transportation of passengers and their hand-carried packages or baggage by surface, overhead, or underground transportation except aircraft or taxicab (section 1(5)).

The powers of a municipal transit department operating a system include the power to acquire, construct, own, operate, and maintain a system within a city or town; to use the streets, alleys, roads, highways, and other public ways within the city or town; and, in the construction, reconstruction, repair, maintenance, or operation of a system, to relocate, raise, reroute, change the grade of, or otherwise alter the construction of any street, alley, highway, road, or railroad (art. 11182, section 6(c)).

Nothing in the statute permits a municipality that has adopted a local sales and use tax to fund a transit department to use those funds for the general maintenance of its public streets. The statute states that a transit department "may use the streets, alleys, roads, highways, and other public ways within the city or town" (section 6(c)). A transit system's right to use city streets necessarily includes the right to subject them to normal wear and tear, which the Legislature must have contemplated in adopting article 11182 with this provision; nowhere does the statute tie the ordinary use of a public street to the payment of a fee by the transit department from tax funds raised solely to fund the department's operation of a mass transit system. Although the statute contemplates that constructing and operating a system may require construction projects affecting city streets, it limits the department's powers to circumstances requiring the relocation, raising, rerouting, alteration, or changing of the streets used by the system (section 6(c)). The ordinary maintenance of a city street over which the vehicles of a mass transit system may pass is thus not within the enumerated powers of the transit department upon which tax funds may be spent.

Citations

Statutory authority:

• Article 11182, V.T.C.S. § 1(5) (definition of "mass transit")
• Article 11182, V.T.C.S. § 1(6) (definition of mass transit "system")
• Article 11182, V.T.C.S. § 2(a) (authority to establish a mass transit department)
• Article 11182, V.T.C.S. § 6(c) (powers of a transit department, including use and alteration of streets)
• Article 11182, V.T.C.S. § 8(f) (taxes may be used only for mass transit purposes)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/jim-mattox/jm-979
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1988/jm0979.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor OCR errors may remain; the linked PDF is authoritative.

November 14, 1988

Honorable John T. Montford
Chairman
State Affairs Committee
Texas State Senate
P. O. Box 12068
Austin, Texas 78711

Opinion No. JM-979

Re: Whether mass transit taxes collected under article 11182, V.T.C.S., may be used by a municipality to maintain its streets (RQ-1535)

Dear Senator Montford:

You ask whether taxes dedicated to mass transit and collected pursuant to article 11182, V.T.C.S., may be used by a municipality to maintain its public streets. We conclude that such taxes may not be used for that purpose.

Article 11182 permits certain incorporated cities and towns to establish a mass transit department. Id. § 2(a). If a local sales and use tax dedicated to providing a method of funding a mass transit system is approved by the voters, then the city transit department may build or acquire and operate such a system. Id. §§ 3, 4, 5, 7. Taxes collected pursuant to article 11182 "may be used only for mass transit purposes." Id. § 8(f).

The statute defines a mass transit "system" to mean

all real and personal property owned or held by an incorporated city or town and operated for mass transit purposes, including land, easements, rights-of-way, other interests in land, franchises, rail and bus lines, stations, platforms, terminals, garages, shops, control houses, other buildings and structures, rolling stock, signals, other equipment, supplies, and other facilities necessary or convenient for the use of or access to mass transit by persons or vehicles or for the protection or environmental enhancement of mass transit.

V.T.C.S. art. 11182, § 1(6). "Mass transit" is

the transportation of passengers and their hand-carried packages or baggage by means of surface, overhead, or underground transportation except aircraft or taxicab.

Id. § 1(5).

The relevant powers of a municipal transit department operating a mass transit system include the power to:

acquire, construct, own, operate, and maintain a system within a city or town. A department may use the streets, alleys, roads, highways, and other public ways within the city or town. In the construction, reconstruction, repair, maintenance, or operation of a system, a department may relocate, raise, reroute, change the grade of, or otherwise alter the construction of any:

(1) street, alley, highway, road, or railroad . . . .

V.T.C.S. art. 11182, § 6(c).

Thus, nothing in the statute permits a municipality which has adopted a local sales and use tax to fund a municipal transit department to use those tax funds for the general maintenance of its public streets. Additionally, the statute unequivocally states that a transit department "may use the streets, alleys, roads, highways, and other public ways within the city or town." V.T.C.S. art. 11182, § 6(c).

In our opinion, a transit system's right to "use" city streets necessarily includes the right to subject such streets to normal wear and tear such as must have been contemplated by the legislature when it adopted article 11182 with this provision. Nowhere does the statute tie the ordinary use of a public street to the payment of a fee by the transit department from tax funds raised solely for the purpose of funding the department's operation of a mass transit system.

Although the statute contemplates that the construction and operation of a mass transit system may require the department to undertake construction projects affecting city streets, it limits the department's powers to only those circumstances requiring the relocation, raising, rerouting, alteration, or changing of the streets used by the mass transit system. V.T.C.S. art. 11182, § 6(c). The ordinary maintenance of a city street over which the vehicles of a mass transit system may pass is thus not within the enumerated powers of the transit department upon which tax funds may be spent.

SUMMARY

Taxes raised to pay for the acquisition and operation of a mass transit system under the aegis of the mass transit department of a city or town, article 11182, V.T.C.S., may not be used to pay for the maintenance of city streets.

JIM MATTOX
Attorney General of Texas

MARY KELLER
First Assistant Attorney General

LOU MCCREARY
Executive Assistant Attorney General

JUDGE ZOLLIE STEAKLEY
Special Assistant Attorney General

RICK GILPIN
Chairman, Opinion Committee

Prepared by D. R. Bustion, II
Assistant Attorney General